What the term Sponsor means in the UAE

When we think about the sponsor, we normally think about some person or company who provide some form of financial support. In case of the UAE, this term has two different meanings. One – the standard meaning we know under the term “sponsor” The second one is very different and quite specific for the UAE. This other meaning of sponsor or “local sponsor” is some local citizen or government body who are required to establish a company on the main territory of the UAE or obtain residency visas.

In case of local companies, the local sponsor normally means a UAE citizen who holds 51% of shares of the local company as the silent shareholder and acts as your authorized representative by the UAE government authorities.

In other cases, for example, if you register a free zone company, such company can be 100% under your ownership. However, when you apply for the residency visa, your “local sponsor” is the free trade zone authority of the free zone where your UAE company is registered.

Local sponsor, apart from being your representative, is also liable for your actions. On the other side, to limit the powers of your sponsor, it is possible to sign an additional agreement outlining such limitations. In typical scenarios, local sponsor has no particular roles in business and is only in charge of contacting local authorities when this is required – for example, for obtaining and renewing the license, getting labor permits and other administrative paperwork for the company. For such service, local sponsor charges some fixed amount per annum.

In some certain cases, for example, if you as the local company apply for some specially regulated license (for example, tourist company) your sponsor must have the clear records in the UAE and some certain professional qualifications to be able to make sure the operations of such UAE travel company are performed within the applicable regulatory framework.

Meaning of local sponsor in the UAE in case of residency visas

There are also other scenarios and meanings for the sponsor, especially about residency visas in the UAE. For example, if you are employed by some company in the UAE, your sponsor for your visa is the company which employed you. And when you have your visa – investor visa or employment visa and apply for visas for your wife and kids under your visa – you would be the sponsor for their UAE visas.

When you register your fee zone company and obtain your visa, the free zone authority which, as mentioned above, acts as your local sponsor, does not charge you any extra fees apart from the regular residency visa processing fees.

For all the points and questions on how to register a company in the UAE and the available forms of companies and additional questions you may have on the local sponsors, please feel free to contact us.